diamond geezer

Saturday, August 09, 2014

My bank offers what it likes to call a savings account. It's a special preferential account, not your bog standard current account, available to anyone who chucks in one pound or more. It offers a pathetic rate of interest, as is the modern way, because protecting debtors from penury is deemed more important than rewarding the thrifty for their prudence. But that's still a better interest rate than all of my bank's other instant access accounts, allegedly, so long as you remember one crucial fact.

I opened my savings account a year ago, a year to the day. I spoke to a bank employee on the phone and ran through their rigmarole, confirming details and agreeing terms. They ran through their appointed script, reminding me I had fourteen days to opt out, and pledged to send me a welcome pack of terms and conditions. And so my money began to earn interest, admittedly a miserable amount, but better than keeping my cash in a bag under the bed. And so it's been each month since then, a minor electronic top-up, at least until this week came round.

For mine is one of those ghastly bank accounts that self-combusts after twelve months. Not completely, because that would be theft, but a partial collapse is pre-programmed and kicks in after 365 days. The interest rate drops overnight from market rate to barely above zero, and there it stays for as long as it takes me to notice. Because my bank never had any intention to pay their headline rate for long, it was merely there to grab my attention, and once they think my money's safely stashed they whip the bonus away.

When it comes to paying interest it seems my bank, and quite possibly your bank too, is inherently evil. They like to lure in savers with big numbers, or at least relatively big, and then hope inertia and forgetfulness kicks in. When you open your account they make it clear the savings rate is for one year only, but one year sounds like a long time, so why worry now? Of course after a year most people have forgotten, because they have thousands of other things to remember in the meantime. And so the anniversary of the opening day passes unnoticed, the savings rate plummets, and the bank is quids in.

I noticed. More to the point I noticed before the one telltale sign, which is a month where the interest paid in your statement suddenly inexplicably plummets. By this time you've already lost out and the bank has won, but not as badly as if you never notice the decrease at all. In the bank's ideal scenario your money sits there forever, worthlessly to you but relentlessly accruing interest for them. But I'd planned more proactively than this and set a calendar reminder twelve months ago for the first week of August. And yes, I had indeed entirely forgotten... but hey presto, up it popped, and I sprang into action.

And then the stupid telephone charade began. I rang the hotline and got someone called Mohammed, and the game was afoot. My bank introduces a new special saver account each year, identical in all ways but two to the previous incarnation. First the issue number on the end of the account name increases by one, so that technically this is a different account to that which went before. And secondly the introductory bonus interest rate drops a bit from what it was last year, because although technically there's been an economic recovery in reality there hasn't and so I must be punished.

I had to go through all the palaver of setting up a new account, all the listening to terms and conditions, all the confirming details and agreeing terms. I had to listen to Mohammed running through his appointed script, because that's what financial regulation requires. He said he'd be sending all the paperwork through in the post again, like I care, but he still has to. And eventually, after spending 20 minutes of my own time and money on this nigh-pointless phone call, he shut down my year-long savings account and opened another that looked identical apart for the eight digit number.

It's appalling that my bank requires such an annual rigmarole, and all to end up with an interest rate that's actually lower than they were giving me the day before. It's even more appalling that this is I think the sixth consecutive year they've pulled this stunt, and the sixth year I've jumped through their hoops to avoid dropping back to a derisory nought point not-very-much percent.

I should, I know, dump my savings somewhere with a better rate of return, in a financial institution that doesn't screw its user base so openly. I should, I'm sure, attempt to limit this continued erosion of my nest egg as inflation slowly steals my wealth away. But until then I've signed up to another twelve months at an ever diminishing rate of return, because inertia keeps me coming back for another kicking. And I've already set a calendar reminder for the first week of August next year, just before the headline rate plummets once again, when no doubt I'll be phoning up my bank for another year of fiscal inadequacy.